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Operating Underground

In some countries, the "black economy" is about the size of the official economy. Variously called the black, informal, underground, or shadow economy, this alternative to the familiar everyday economy is peopled by nannies, construction and domestic workers, street corner peddlers, drug dealers and others who are remunerated off the books and bear little if any of the tax burden. Economists can only guess at the size of the US underground economy; a 2005 figure of $970 billion (roughly nine percent of the total economy) is at least realistic. If so, the $1 trillion figure has surely been passed by now, driven by the weaknesses and woes of the economy that most of us experience.

This informal economy interacts with "our world" in surprising ways.& The scalpers at concerts and sports events, for instance. This activity, described as "cheerfully illicit," has its own rules and etiquette. Both buyer and seller are bound by a certain tradition and ritual.

Sudhir Venkatesh, in Off the Books: The Underground Economy of the Urban Poor, takes us to just one poor black neighborhood in Chicago. The unregulated, unreported, and untaxed free enterprise there includes a woman who prepares lunches for a local hospital, a shade tree (actually alley) mechanic, a salon owner who rents her store out for gambling parties, and a preacher who provides mediation services. Flexibility, ingenuity, and survival tend to be the common ingredients.